Taxpayer Advocate: 39 percent of calls to IRS went unanswered in 2012-13

The Internal Revenue Service answered only 61 percent of customer service phone calls it received in the 2012-13 fiscal year, according to national Taxpayer Advocate Nina Olson, who released her annual report today. Their average wait time was about 17.6 minutes. The remainder of the more than 100 million phone calls did not get through. Ten years ago, the IRS was able to respond to 87 percent of the calls, she said.

Olson said in the report that across-the-board spending cuts hurt the IRS’ ability to carry out its duties during the fiscal year. The 16-day partial government shutdown in October delayed the IRS’ processing of refunds for the 2013 tax year. “Because of sequestration, the IRS’s funding was substantially cut, which translated into a reduction in taxpayer service,’’ she said.

The agency came under attack last year after reports that it targeted conservative, tea party-affiliated nonprofits for special scrutiny in deciding whether to grant them tax exemptions, Gannett’s Washington Bureau reports.

“Public trust in its fairness and impartiality was called into question because of reports the IRS subjected certain applicants for tax-exempt status to greater review based on political-sounding names,” Olson said in a statement.

The Taxpayer Advocate said lack of adequate funding for the IRS continues to be a problem and the agency is “increasingly unable to keep up with taxpayers’ demand for help in complying with their tax obligations.” The agency’s workload has increased in the past decade, and its funding and staffing have been cut 8 percent since the 2009-2010 fiscal year.

“The requirement to pay taxes is generally the most significant burden a government imposes on its citizens,” the report said. “The National Taxpayer Advocate believes the government has a practical and moral obligation to make compliance as simple and painless as possible.”

The IRS recently announced it no longer would prepare tax returns for people seeking help, particularly from taxpayers who have low incomes or are elderly or disabled. The agency also said that it would only answer “basic” tax law questions over the phone and at its walk-in sites during the 2014 filing season. The main reason is a lack of resources, Olson said.

She also pointed out that the IRS’s training budget has been cut from $172 million to $22 million since the 2009-10 fiscal year; and the IRS is shortchanged on funding because federal budget rules treat the agency the same way all spending programs are handled — no credit is given for the revenue the IRS collects.

The Taxpayer Advocate recommended that congressional committees work together to develop new procedures to fund the IRS, and the IRS should adopt a Taxpayer Bill of Rights.

Cara Matthews is a member of The Journal News' Tax Team. She has worked as an Albany correspondent and she covered Putnam County government and politics. Before that, she worked at newspapers in Connecticut and covered the state Legislature for one of them.